Importers are awaiting the commissioning of the Qatar Chemical Company (Q-Chem) plant, which is designed to be one of the region's major ethylene and polyethylene suppliers.
Qatar Petroleum (QP) owns 51 per cent of the company with the rest of the stake held by Chevron Phillips Chemical Company International Qatar Holdings LLC (CPCI), a subsidiary of the Chevron Phillips Chemical Company.
Work on the project is underway and the fourth quarter of 2002 has been suggested as the time it will come on stream.
The joint venture agreement was signed on November 16, 1997, between Qatar General Petroleum Company (QGPC) and Phillips Petroleum Company. Since then QGPC became QP and the chemical assets of Phillips Petroleum Company were contributed to the Chevron Phillips Chemical Company, which gave rise to the current ownership. An Emiri Decree was issued on October 6, 1998 to incorporate the company.
The plant, coming up in Mesaieed, 40km south of Doha, will have a capacity of 500,000 tonnes per year (tpy) of ethylene, 453,000tpy of polyethylene and 47,000 tpy of 1-hexene.
"All of the ethylene will be used internally in the production of polyethylene and 1-hexene. The polyethylene will primarily be exported to international markets in Europe and Asia. A small amount of 1-hexene will be used in the production of polyethylene with the rest being exported," said Q-Chem deputy general manager Ahmed Al-Emadi.
With the project under construction, the primary suppliers are the contractors and subcontractors - Kellogg Brown & Root and Technip (KBRT), CCIC, Dodsal, Midmac, Amcom and CB&I.
"Our primary feedstock will be ethane-rich gas, supplied by QP from its NGL-4 project in Mesaieed and additionally we use various utililties including electricity, cooling water and so on," said Al-Emadi.
"The construction is on time and on budget. We look forward to a successful start-up when construction is complete."
The Q-Chem project is financed through a $750 million loan, arranged through a consortium of 24 banks.
The plant's output will be sold through the spot market to Asia, Europe and the Middle East. Business analysts believe the plant commissioning should coincide with a continuing upswing in the Asian chemicals markets ensuring profitability. They contend that the main aim of the project is to move Qatari industry to the more value-added part of the petrochemical spectrum in order that it becomes less vulnerable to overcapacity and price falls.
The engineering, procurement and construction contract, awarded to KBRT, is estimated to be worth $800 million. KBRT will supply the ethylene technology while Chevron Phillips Chemical Company will provide the proprietary technology for the 1-hexene and polyethylene units.
Meanwhile, QP has signed a joint-venture agreement with the US-based Chevron Phillips Chemical Company for developing a new world-class petrochemical complex at Ras Laffan. The project involves developing an ethane cracker unit with a capacity of 1.2 million tpy of ethylene and 750,00 tpy of polyethylene.
The ethane feedstock will be sourced from Qatar's giant North Field, the world's largest non-associated gas field.
The polyethylene plant will utilise Chevron Phillips Chemical Company's proprietary loop process technology.
QP chairman and Minister of Energy and Industry Abdullah bin Hamad Al Attiyah and Chevron Phillips president and CEO Jim Gallogly signed the agreement. Al Attiyah said the project was the realisation of Emir of Qatar Shaikh Hamad bin Khalifa Al Thani's vision to ensure optimum utilisation of the country's hydrocarbon resources by establishing oil and gas-related projects. He added it highlighted areas of interest and the major objectives before the state in the 21st century.
Gallogly said his company was happy to be Qatar's long-term strategic partner in developing a world-class petrochemical enterprise. "Our existing petrochemical project, Q-Chem, has won international praise for project management and finance. It is an excellent example of how two strong partners - Qatar Petroleum and Chevron Phillips - can develop major projects beneficial to both the State of Qatar and Chevron Phillips," said the official.
